That’s the lesson that electric utilities are learning, as the price of renewable energy continues to drop, as state and local regulators increasingly favor renewable power, as alarm grows about the health concerns from burning coal, and as more energy consumers demand cleaner power.

Of the 150 coal-powered plants proposed by electric utilities in recent years, 59 of them were cancelled, abandoned, or tabled in 2007, according to the Center for Media and Democracy. Of those, 44 of the projects were pulled by the utilities themselves, often for reasons of profitability, including: rising construction costs, concerns about the cost of future carbon regulation, or insufficient financing for the project.

Consider: In February 2007, the Texas energy company TXU planned to build 11 new coal-fired power plants in Texas. According to the New York Times, public opposition to the plan ran so high that it damaged the company’s stock price, and caused the company’s board to reconsider the plan. Within months, TXU had been bought out by private equity firms, which quickly scrapped eight of the plants.

In November 2007, according to the Idaho Statesman, the Idaho Power Co. told federal regulators that escalating costs combined with climate change concerns had prompted its decision to cancel plans for an Idaho coal-fired power plant. The utility now proposes replacing that plant with a combination of a natural-gas plant, wind farms, and a new geothermal-generating power plant.

And in December 2007, after announcing that its coal-fired power plants were on hold due to rising costs, Westar Energy (the largest electric utility in Kansas) began pursuing regulatory approval for adding new wind power to its mix.

It should be obvious that the tide turning against coal makes it a risky investment. However, while most of the world’s banks are starting to recognize the threat of climate change, none has yet established a policy of avoiding involvement in dirty, doomed-to-obsolescence coal projects, and most could do more to promote renewable energy. So concludes a January 2008 report from Ceres, a coalition of investors working to increase corporate environmental responsibility.

“More banks realize that climate change is a big business issue, but their responses so far are the tip of the iceberg of what is needed,” said Mindy Lubber, president of Ceres, which ranked the world’s largest publicly traded banks on their efforts to mitigate climate change. “As a key provider of capital and financing worldwide, banks must do more to move the economy away from fossil fuels and high-carbon investments that are exacerbating climate change.”

For example, despite its pledge to support “environmentally sustainable business” and “address global climate change” Bank of America spent 100 times more money on fossil fuel projects than on renewables in 2006, according to the Rainforest Action Network. Even worse, Citi (Citigroup) spent more than twice that, using 200 times more money in 2006 to finance dirty energy than on renewables. In fact, during all of 2006, Citi underwrote only one transaction for a renewable energy project.

The Ceres report finds more encouraging results related to the internal operations of the banks. For example, of the 40 banks, 28 say they have calculated their greenhouse-gas emissions, 24 have set goals to reduce those emissions, and 29 are supporting renewable energy projects.

It’s time for banks to bring their external investments in line with their changing internal values. While it’s a sign of progress that climate change concerns now register as corporate governance concerns with the country’s largest financial institutions (due in large part to the efforts of shareholders, concerned about the security of their profits), the industry has far to go.

If you’re a customer or a shareholder of one of these large banks, be sure to contact them with your concerns about their funding of climate-change-causing projects – as well as the wise investment of your money.

Carbon regulations, the health impacts of coal, a changing marketplace, and interest in the renewable energy sector mean that coal-fired power plants are a losing proposition for the future. Encourage the big banks to invest instead in the growing wave of energy efficiency and renewables.